Oil industry expenditures to drill and equip oil and gas wells in the U.S. rose 8.9% to $10.5 billion in 1995, American Petroleum Institute reported.
The 1995 Joint Association Survey found U.S. operators drilled 20,528 wells, up 2.5% from 1994. Total footage was 120,834,000, and average cost per well was $513,415, or $87.22/ft.
Oil wells were up 18.8% at 7,745, gas wells fell 7.1% to 7,863, and dry holes slipped 2.3% to 4,920.
API said average cost per well and per foot last year matched 1981-82 record levels, in nominal terms, because of higher costs for seismic surveys, materials and equipment, and the shift to gas development wells drilled below 15,000 ft.
"However, in adjusting for inflation and drilling activity, the cost to drill a well was 3% lower than in 1994 and 31% lower than in 1984," API said. It said costs for development wells rose 15% to $8.9 billion, while expenditures for wildcats fell 15% to $1.6 billion.
"Onshore development oil drilling (shallower than 10,000 ft) rebounded dramatically in 1995, largely due to activity concentrated in East-Central California's Kern County, Central and West Texas, and Utah.
"Development gas drilling nearly doubled in Michigan's shallow (less than 2,500 ft) Devonian Antrim shale gas plays and the deeper (more than 15,000 ft) Gulf Coast basin province of East Texas.
"The Gulf of Mexico was the most active offshore area, with limited activity off California and Alaska. The number of deep wells drilled in the gulf rose 50%, while their costs were up 40%."
API said the most expensive wells, each more than $1 million, were drilled in South Louisiana and the Gulf Coast basin in Texas. The least expensive, on a per-well basis, under $100,000, occurred in the Illinois basin.
It said horizontal well drilling activity continued at a brisk pace, rising 32% to 1,175 completions that cost a total $1.4 billion.
API said, "Since the federal tax credit ran out earlier in the decade, coalbed methane drilling has fallen off. Last year 180 coalbed methane gas wells were completed, down 15% from 1994."
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